Which of the Following Statements Best Describes Accounting for a Partnership

question 32

Multiple Choice

Which of the following statements best describes accounting for a partnership?

• A)A partnership may be a profit or a nonprofit entity.
• B)A partnership may use federal income tax rules to account for transactions in their journals and ledger accounts.
• C)A partnership's equity section contains both capital and retained earnings accounts.
• D)A partnership may only distribute money through a dividend payment.

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Definitions:

Reification

Turning an abstract into a concrete thing—for example, assuming that because there are measures of intelligence, there is a unitary, tangible entity called intelligence.

Abstraction

The process of removing physical, specific details to focus on ideas or concepts at a more general, simplified level.

Real Thing

An authentic object or concept, as opposed to an imitation or reproduction.

Likert Scale

An interval scale on which respondents record their reactions to statements by checking their level of agreement between, for example, “strongly agree” and “strongly disagree.”